No images? Click here
US-Iran talks, oil shock
and midterm fallout
15 April 2026
US Vice President JD Vance travelled to Islamabad this weekend to lead direct negotiations with Iranian officials to end the war. No deal was reached, but both sides outlined some terms that suggest some flexibility. Washington asked for a 20-year moratorium on Iran’s uranium enrichment and Tehran responded with an offer to suspend enrichment for five years. They are also negotiating terms around the removal of nuclear material.
Following the stalled talks, Washington escalated pressure, commencing a blockade of the Strait of Hormuz on Monday. This attempt to exert more leverage over Iran by restricting a significant source of income will also have flow-on effects for two of Iran’s closest partners, China and Russia. Both countries have received limited benefits from the war. Russia’s oil tax revenue is projected to double and the conflict significantly depleted US missile reserves. At the same time, both countries are now confronting strategic downsides: a closer alignment between the United States and Gulf states and sustained support from many European allies for US efforts despite acrimony between President Trump and NATO allies.
One of the immediate effects of the blockade was another surge in oil prices. While this is being felt worldwide, the political impact is likely to be most acute in the United States as Congress heads towards highly contested midterm elections in November. As USSC CEO Dr Michael Green noted in his op-ed for The Australian this weekend, “Only 40 per cent of Americans supported the war at the outset — the lowest in history at the start of any conflict — and more than 70 per cent blame Trump’s actions for higher prices, the most salient issue for most voters going into the midterms in November.”
President Trump, himself, told Fox News that gas prices are likely to remain through the midterms. This reinforces growing electoral risks for Republicans, given that economic conditions dominated voter priorities in 2024. Those risks have been further heightened by President Trump’s emerging feud with Pope Leo XIV, including President Trump sharing a controversial AI image depicting himself as a Christ-like figure, straining Republican support among Catholic voters. Reflecting this changing political calculus, the Cook Political Report recently shifted four Senate races towards Democrats.
As we saw in Hungary last weekend, when a populist leader loses public trust, is perceived to have a negative influence on foreign policy, and fails to improve economic hardships, popular support can dissipate quickly. President Trump may not be on the ballot in November, but the consequences of his foreign policy decisions are.
Without a change in the trajectory of the economy and public trust in the Trump administration, Democrats are increasingly likely to take the House in November. This could lead to congressional investigations and impeachment proceedings against President Trump, ensuring the end of his second term is mired in domestic political battles which, itself, would constrain his political power both at home and abroad.
Mari Koeck
Director of Engagement and Impact
Lead image: US Vice President JD Vance arrives for a meeting with Pakistani Prime Minister amid the US-Iran peace talks in Islamabad on 11 April 2026 (photo by Jacquelyn Martin via Getty).
"So, there you have it, the meeting went well, most points were agreed to, but the only point that really mattered, NUCLEAR, was not."
Recent content from us
BRIEFHarnessing Australia’s space strengths for the AllianceAs the Artemis II return renews interest in space exploration, USSC Lecturer in American Studies Dr Kathryn Robison and Space Industry Association of Australia Head of Membership Isobel Haddow assess Australia's space prospects in this new brief and warn that Australia risks being a consumer, not a contributor, in space. |
COMMENTARYIran war doesn’t herald post-American world but there are opportunities for Australia in the geopolitical shakeupIn this op-ed for The Australian, CEO Dr Michael Green looks at the geopolitical implications of the Iran war and notes the picture is more mixed than some analysis would suggest, opening up some opportunities for Australia. |
In the news
The Guardian | Australia must be more self-reliant – but it can’t afford to throw the US baby out with the bathwater
In this op-ed for The Guardian, USSC Chairman Arthur Sinodinos AO urges Australia to prioritise self-reliance, while taking a pragmatic approach to its alliance with the United States, saying, "We must plan for a world where Australia is more self-reliant in economics, defence and security and has more options because it has built strong partnerships with like-minded democracies across the globe."
Sydney Morning Herald | Going, going, gone: What it means to be a ‘failed’ state
USSC Director of Foreign Policy and Defence Dr Lavina Lee spoke with the Sydney Morning Herald about assessments of Iran as a "failed" state. She explained, "A failed or failing state is one that doesn’t have control over the monopoly of the legitimate use of force, that has weak or almost nil capacity to provide for the basic needs of its people."
SBS | From Jesus imagery to a 'holy war': Does Donald Trump really think he's divine?
SBS News spoke with experts about the AI image President Trump posted, portraying himself as a Christ-like figure. Associate Professor David Smith noted, "I don't think he's got such strong religious convictions that he himself would believe that he is divine in some way."
Manage your email preferences | Forward this email to a friend
United States Studies Centre
Institute Building (H03)
University of Sydney NSW 2006